Earlier quoted context omitted.
Shares vested x fair market value at vest. So you get 1000 shares when you join, worth $1/share. 250 vest on your first year, and that's when tax is due. But say the company grows and shares are $5/share. 5x250 is 1250 taxed income on the anniversary. Normally at early stages you're talking many thousands of shares though, that can increase rapidly. The fmv is recalculated every year, or on any fundraise events. It n…
But you can frontload all the "income" and taxes upfront. That's what an 83(b) election is: "Hi IRS, I'd like to pay/recognize this taxable event all right now, even before it vests". So you get 1000 shares x $1/share = $1000 of income, and you pay taxes on it.
If they are options, and your company allows you to exercise early, then you can buy them and pay $1000 to convert to restricted stock, file an 83(b), and it's $0 in taxes as theres no gain. If they are just restricted stock(not to be confused with RSU) then you can 83(b) like you said. But any way you do it, including holding options, has a bunch of risk so every situation is unique.